GMR Group Plans to Raise $1 Billion As it Eyes Turnaround

Infrastructure company GMR Group plans to raise at least $1 billion (Rs 6,672.5 crore at $1 = Rs 66.72) over the next two years to cut debt, repay investors in its airports business and prepare for a new phase of growth, its chief financial officer said on Monday.

GMR, which has a net debt of Rs 41,000 crore ($6.2 billion), has held preliminary talks with investors about selling stakes in its airports and energy businesses but is "not in a hurry" to sell and talks are not at an advanced stage, CFO Madhu Terdal said.

New funding for loss-making GMR could come from a variety of sources, including listing its energy or airports businesses.

"It will be partly used to repay debt. We may also grow into the renewables space, or look at a small expansion into our existing energy business," Terdal told Reuters in a telephone interview. "We are now in the turnaround phase."

Two Indian newspapers said on Monday that Fairfax Financial Holdings and Singapore's Changi Airports International were in talks about taking a stake in GMR's airports business, but Terdal said the reports were inaccurate.

"GMR Airports are jewels in the crown. We are not going to do in a hurry anything just because we are under stress at the group level," he said.

Like many Indian infrastructure companies, GMR has been hobbled by large debts and a squeeze on its earnings in the last few years caused by an economic slowdown and delays in getting coal for its plants.

Terdal said with the increased availability of coal and a raft of new power purchase deals struck this year, GMR's outlook was improving.

In September, the company started earning more than it owes in debt repayments as more projects came on line, generating cash.

GMR last week raised $300 million from Kuwait Investment Authority by selling 60-year bonds.

"We are doing a slew of things so that in the next 12-18 months we are ready for growth," he said.

© Thomson Reuters 2015